Daily market commentary: Nepse ends volatile week with a moderate decline
December 24, 2020 08:00 PM NPT
KATHMANDU, Dec 24: After opening Thursday’s session in the green, the local equity market cut its gains quickly to trade in the negative territory within the first trading hour. Thereafter, the Nepal Stock Exchange (Nepse) index remained under the opening level and witnessed a steady decline to close trading at 2,038.63 – down 29.83 points against Wednesday’s close.
The bourse witnessed an eventful week with the index tanking almost 100 points on Sunday as the prime minister proposed parliament dissolution to the president's office. With the president approving the proposal on Sunday afternoon, investors resorted to panic selling throughout the day. The rout extended to Monday morning’s trading where the index gave up another 60 points. However, Nepse staged a quick rebound which stretched till Tuesday recouping all of Sunday's losses. A small correction followed suit in the last couple of sessions of the week. Hence, political developments will likely play a key role in determining stock market sentiment in the coming sessions. Total turnover on Thursday stood at Rs 5.37 billion.
Most of the segments corrected in the last trading day of the week barring Hotels and Trading groups. The Hotels sub-index jumped 4.91%, while the Trading sub-index closed 0.87% higher. The Life Insurance sector slumped after the previous day's rally. The group’s sub-index fell 3.06%. The ‘Others’ segment also fell 2.25%. Non-Life Insurance, Microfinance, Banking and Hydropower sub-indices fell over 1% on average. All other sectors suffered modest losses.
Shares of Nabil Bank Ltd were traded the most with a turnover of Rs. 615 million. Nepal Life Insurance Company Ltd, NIC Asia Bank Ltd and Prabhu Bank Ltd were the other active stocks with turnovers of Rs. 598 million, Rs. 323 million and Rs. 282 million. Siddhartha Bank Ltd, National Life Insurance Company Ltd and Nepal Credit and Commerce Bank Ltd’s shares were also heavily traded.
Hotel stocks saw notable charm as Soaltee Hotel Ltd and Oriental Hotels Ltd jumped more than 5% each. Energy stocks – Mountain Energy Nepal Ltd and Panchthar Power Company Ltd closed more than 4% higher. Siddhartha Bank Ltd, Global IME Bank Ltd, Nepal Hydro Developers Ltd and RMDC Laghubitta Bittiya Sanstha Ltd were the other major advances.
On the other hand, Samriddhi Finance Company Ltd fell over 8.11% followed by United Idi Mardi RB Hydropower Ltd and Panchakanya Mai Hydropower Ltd, which lost 6.3% and 5.56%. Mahila Sahayatra Microfinance Bittiya Sanstha Ltd and Chhyangdi Hydropower Ltd shed more than 5%. Nepal Credit and Commerce Bank Ltd, Nabil Bank Ltd and Nepal Life Insurance Company Ltd were among other losing scripts.
As per the ARKS technical analysis, the market formed a small bearish candlestick reflecting sellers’ dominance on Thursday. The index failing to break out above 2,100 point’s mark suggests some more correction on cards. Momentum indicators indicate that the market will likely consolidate or correct towards the 2,000's zone. Nonetheless, with the index trading firmly above short and medium term moving averages overall uptrend still remains intact. Support for the market lies at around 1,900 mark.
This column is produced by ARKS Capital Advisors Ltd.
(Views expressed in the article are those of the producer and do not necessarily reflect those of this publication)